Exhibit 4.9


 


CERTIFICATE OF DESIGNATION, PREFERENCES AND


RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL


RIGHTS OF SERIES C CONVERTIBLE


PREFERRED STOCK


OF VITAL LIVING, INC.


 


Pursuant to Section NRS 78.1955 of the Nevada Revised Statues


of the State of Nevada


 


The undersigned, Brad Edson and Stuart
Benson, being the duly elected Chief Executive Officer and Secretary of Vital
Living, Inc. (the “Corporation”), a corporation organized and existing under
the Nevada Revised Statues, in accordance with the provisions of NRS 78.1955
thereof, DO HEREBY CERTIFY:


 


That pursuant
to the authority conferred upon the Board of Directors by the Restated
Certificate of Incorporation of the Corporation, the Board of Directors adopted
the following resolution creating a series of 3,000,000 shares of preferred
stock designated as Series C Convertible Preferred Stock:


 


NOW,
THEREFORE, BE IT RESOLVED, that pursuant to the authority conferred upon the
Board of Directors of this Corporation in accordance with the provisions of the
Restated Certificate of Incorporation, there is hereby established, authorized
and created a series of the authorized preferred stock of the Corporation,
$.001 par value per share, which series shall be designated as:


 


“Series C Convertible Preferred Stock”


 


shall consist of 3,000,000
shares (“Shares” or singularly, a “Share”) and shall have the following
preferences and relative, participating, optional and special rights and
qualifications, limitations and restrictions.


 


The rights,
preferences, restrictions and other matters relating to the Series C Preferred
Stock are as follows:


 


The Preferred
Stock is designated as the Company’s Series C Preferred Stock (the “Preferred
Stock”) and is subject to the terms and conditions of the Subscription
Agreement (the “Subscription Agreement”) of even date herewith between the
Company and the Investor.


 


1.                                       DIVIDEND
PROVISIONS.  The holders of the
Preferred Stock will be entitled to a two preferred dividends at the rate of
50% per annum, payable on the first and second anniversary of the issuance of
this certificate.


 


2.                                       LIQUIDATION
PREFERENCE.  There shall be no
liquidation preference.  Upon
liquidation of the Company, holders of Series C Shares shall receive
distributions, if any, on a basis assuming the conversion of such shares into
shares of Common Stock.


 


3.                                       REDEMPTION.


 


This
corporation has no right to redeem the Series C Preferred Stock.


 

















 


4.                                       CONVERSION.  The holders of the Preferred Stock shall
have conversion rights as follows (the “Conversion Rights”):


 


Each shares of
Preferred Stock shall be convertible, at the option of the holder thereof, at
any time following the first anniversary of the date of issuance of such share
at the office of this company or any transfer agent for such stock, into a like
number of fully paid and non-assessable shares of Common Stock.


 


5.                                       MECHANICS
OF CONVERSION.  Before any holder of
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of this corporation or of any transfer agent for the
Preferred Stock, and shall give written notice to this corporation at its
principal corporate office, of the election to convert the same and shall state
therein the name or names in which the certificate or certificates for shares
of Common Stock are to be issued.  This
corporation shall, as soon as practicable thereafter, issue and deliver at such
office to such holder of Preferred Stock, or to the nominee or nominees of such
holder, a certificate or certificates for the number of shares of Common Stock
to which such holder shall be entitled as aforesaid.  Such conversion shall be deemed to have been made immediately
prior to the close of business on the date of such surrender of the shares of
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock as
of such date.


 


(d)                                 No
Impairment.  This corporation will
not, by amendment of its Articles of Incorporation or through any
reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by this corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 5
and in the taking of all such action as may be necessary or appropriate in
order to protect the Conversion Rights of the holders of the Preferred Stock
against impairment.


 


(e)                                  Reservation
of Stock Issuable Upon Conversion. 
This corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Preferred Stock, such number of
its shares of Common Stock as shall from time to time be sufficient to effect
the conversion of all outstanding shares of the Preferred Stock; and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of the
Preferred Stock, in addition to such other remedies as shall be available to
the holder of such Preferred Stock, this corporation will take such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes, including, without limitation, engaging
in best efforts to obtain the requisite shareholder approval of any necessary
amendment to the corporation’s Articles of Incorporation.


 


(f)                                    Notice.  Any notice required by the provisions of
this Section 5 to be given to the holders of shares of Preferred Stock shall be
deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at his address appearing on the books of
this corporation.


 


6.                                       VOTING
RIGHTS.  The holder of each share of
Preferred Stock shall not have any voting rights.


 


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IN WITNESS
WHEREOF, we have executed and subscribed this Certificate and do affirm the
foregoing as true under the penalties of perjury as of this 7th day
of August, 2003.


 


 


	
   

  	
  /s/ Bradley
  Edson

  	
   

  
	
   

  	
  Brad Edson,
  Chief Executive Officer

  



 


 


	
  /s/ Stuart
  Benson

  	
   

  
	
  Stuart
  Benson, Secretary

  



 


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